When you leave a job, move your money to an account you control
An IRA rollover is simply moving money from one retirement account to another. Rollovers are typically done when you leave a job and have money in the employer’s retirement plan like a 401k. Rather than keep it there, and subject to the employer’s terms, most people will open their own traditional IRA and transfer the money.
Most financial institutions are desperate for your money and will make the process easy. Just give them a call—or fill out an online form on their Web site—and have your account information ready. A messier option is to get your old employer to issue you a check for the full amount of the 401k. You then have 60 days to deposit the check in a new IRA, or face penalties.
There are no penalties for a properly executed rollover—you still won’t have to pay taxes until you withdraw the money during retirement.